Posted by Craig on June 07, 2000 at 12:54:54:
Flipping is a broad term used differently by many people involved in real estate.
It can mean purchasing a house with your own money or borrowed funds, and selling it for a higher price sometime shortly after it is bought. It can mean having a contract to purchase a house and assigning that contract for a price to someone who will then purchase the house. In this case you are flipping the contract.
It can mean having a contract to purchase then finding a buyer for a higher price before you actually close on your purchase. In that case you would be doing what is more appropriately termed a “simultaneous” or “double” closing.
If you’re the person doing the flipping there may not be any great advantage to your buyer. If you’re flipping contracts the advantage to your buyer may be that he doesn’t have to take the time to find good deals, if you’re bringing them to him. In this case your buyer is still paying a wholesale price for the home. In the other cases you buyers are likely paying the retail price, so there aren’t any great advantages to them. If you’re reselling using owner or “seller” financing the advantage may be that you’re buyers don’t have to deal with a bank or mortgage company.